Angus Taylor pledges to index tax brackets to inflation, slash migration in budget reply
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The news: Opposition Leader Angus Taylor has pledged to index Australia’s tax brackets to inflation, in what he describes as “generational” reform designed to end bracket creep.
The context: Delivering his first budget reply on Thursday evening, Taylor also argued migration was “changing Australia for the worse” as he pledged to cap Australia’s intake based on the numbers of houses built nationally.
The new Opposition leader’s major tax announcement was a plan to end bracket creep, which he described as a “stealth raid on Australians working hard to get ahead”.
Taylor claimed Labor was “stealing” from Australians via inflation, which has been heavily driven by the Middle East war, via the “stealth raid”.
“Under a Coalition government I lead, this will end,” he said.
“Any government that wants to tax Australians more should have the courage to front up and to take that tax increase to an election.”
Bracket creep occurs when inflation and wage growth push taxpayers into higher tax brackets, meaning they pay higher tax even when their purchasing power has not increased.
Given bracket creep allows governments to increase revenue without formally raising taxes, Taylor insisted indexation would “force [it] to respect your money”.
Under Taylor’s proposal, the bottom two tax brackets (covering those earning $18,201 to $135,000) would be indexed to inflation from 2028-29, the first financial year after the next election’s expected date.
The plan would then be expanded to cover all taxpayers from 2031-32.
Taylor reportedly championed the change as shadow treasurer before the last election, but was overruled by then-Liberal leader Peter Dutton.
Dutton instead described indexation as an “aspiration” weeks before his devastating election loss.
Taylor also confirmed plans to link Australia’s migration intake to its housing supply, claiming “mass migration”, which he has yet to define, was “changing Australia for the worse”.
“Never again will a government be able to bring in more people than our housing can support,” Taylor said.
But the Opposition leader argued migration intake would initially need to be “well below” the cap, given what he said was the “magnitude of people coming in under Labor”.
“We must allow the housing market to catch up. Only closer to the next election can we provide a precise immigration number,” he said.
Taylor’s speech also included a $5 billion proposal to boost infrastructure — including roads, water and power — which he claimed would unlock 400,000 new homes.
What they said: “This is generational tax reform,” Taylor told parliament.
“It’s fair, simple, and honest. It will back Australians to work hard, take risks, and invest in their future. It will force government to respect your money.”
The sources: Angus Taylor budget reply speech, The Australian Financial Review
